In a new letter filed today, the American Bankers Association, America’s Credit Unions, Association of Military Banks of America, Bank Policy Institute, Consumer Bankers Association, Defense Credit Union Council, Independent Community Bankers of America, Electronic Payments Coalition, Mid-Size Bank Coalition of America and National Bankers Association warned that any legislative initiatives to expand the power of the federal government to intervene in the U.S. credit card market would harm consumers, small businesses and financial institutions. Proposals like the misguided Durbin-Marshall bill or any expansion of the Durbin Amendment would reduce consumer choice, increase costs and fraud risks, and create economic challenges for smaller financial institutions.
In the letter, the associations explained that government intervention in the credit card market would disadvantage small businesses. The letter highlighted a 2024 paper by a University of Miami finance professor that found “small businesses would be put ‘at a further competitive disadvantage’ to large corporate megastores if the Durbin-Marshall bill were to become law, estimating that almost all of those savings will accrue to retailers with $500 million or more in annual sales, with little going to small businesses.”
The groups also noted that consumers would lose access to popular rewards programs, and that a reduction in rewards and cash back opportunities would significantly harm minority and lower-income consumers. “The International Center for Law and Economics found that ‘77% of cardholders with a household income of less than $50,000’ have an active rewards card. The Durbin-Marshall bill would take away rewards options from lower-income Americans who value those rewards benefits, not just wealthy individuals,” the associations wrote.
The groups also pointed to evidence that corporate megastores would not pass along savings to consumers. “The Congressional Research Service released a report stating, ‘it is not clear whether retailers would pass interchange savings on to consumers’ and ‘might face higher incidences of fraud,’” according to the letter.
The associations also explained that the U.S. payments ecosystem is rife with competition and choice. “Credit cards, debit cards, buy-now-pay-later, checks, cash, ACH transactions, wire transfers, and real time payment rails provide businesses and individuals with a multitude of payment options. There is no evidence of significant concentration in the credit card market. In fact, the market for consumer cards concentration is far below the DOJ threshold and is far less concentrated than other industries.”
“The payment card system is convenient, secure, and hassle-free,” the groups wrote. “It protects consumers against fraud, guarantees businesses receive timely payments, funds reward programs like cash back, and powers the American economy, from brick-and-mortar establishments to innovative e-commerce platforms 24 hours a day, seven days a week, 365 days a year. The Durbin-Marshall bill, and any other legislation that intervenes in the credit card market, puts all that in jeopardy.”
###
About the American Bankers Association
The American Bankers Association is the voice of the nation’s $24.1 trillion banking industry, which is composed of small, regional and large banks that together employ approximately 2.1 million people, safeguard $19.2 trillion in deposits and extend $12.7 trillion in loans.
About America’s Credit Unions
America’s Credit Unions is the unified voice for not-for-profit credit unions and their more than 140 million members nationwide. America’s Credit Unions provides strong advocacy, resources and services to protect, empower and advance credit unions and the people and communities they serve. For more information about America’s Credit Unions, visit AmericasCreditUnions.org.
About the Association of Military Banks of America
The Association of Military Banks of America (AMBA) was founded in 1959. AMBA is a not-for-profit association of banks operating on military installations, banks not located on military installations but serving military customers, and military banking facilities designated by the U.S. Treasury. The association’s membership includes both community banks and large multinational financial institutions, all of which are insured by the Federal Deposit Insurance Corporation.
About Bank Policy Institute
The Bank Policy Institute is a nonpartisan public policy, research and advocacy group that represents universal banks, regional banks and the major foreign banks doing business in the United States. The Institute produces academic research and analysis on regulatory and monetary policy topics, analyzes and comments on proposed regulations, and represents the financial services industry with respect to cybersecurity, fraud, and other information security issues.
About Defense Credit Union Council
The Defense Credit Union Council is the trusted resource for credit unions on all military and veteran matters. By maintaining a close and constant liaison with the Pentagon, Capitol Hill, and NCUA, the Council champions the interests of credit unions serving our military and veteran communities by coordinating policy, procedures, and legislation impacting morale and welfare, financial readiness, and the delivery of quality financial products and services. Organized in 1963, the Council’s membership is comprised of more than 180 credit unions with over 40 million members. If you would like more information about this topic, please contact DCUC at hlaverty@dcuc.org.
About the Consumer Bankers Association
The Consumer Bankers Association represents America’s leading retail banks. We promote policies to create a stronger industry and economy. Established in 1919, CBA’s corporate member institutions account for 1.7 million jobs in America, extend roughly $4 trillion in consumer loans and provide $275 billion in small business loans annually. Follow us on Twitter @consumerbankers.
About the Electronic Payments Coalition
We are the credit unions, community banks, payment card networks, and institutions who support the backbone of our economic system: electronic payments. Learn more at electronicpaymentscoalition.org.
About the Independent Community Bankers of America
The Independent Community Bankers of America® has one mission: to create and promote an environment where community banks flourish. We power the potential of the nation’s community banks through effective advocacy, education, and innovation. As local and trusted sources of credit, America’s community banks leverage their relationship-based business model and innovative offerings to channel deposits into the neighborhoods they serve, creating jobs, fostering economic prosperity, and fueling their customers’ financial goals and dreams. For more information, visit ICBA’s website at icba.org.
About the Mid-Size Bank Coalition of America
Founded in 2010, the MBCA is a distinct and singularly focused “self-help” community for America’s mid-size banks. The MBCA provides a forum to facilitate the utilization of information, market developments and best practices tailored toward mid-size banks. Our entrepreneurial culture also allows for consortium opportunities to share research and explore commercial ventures, resulting in a more resilient and competitive banking landscape that helps reduce the cost of banking services to consumers.
About National Bankers Association
Founded in 1927, the National Bankers Association is the voice for the nation’s Minority Depository Institutions (MDIs). No other trade association is focused solely on the priorities, federal advocacy, and representation of minority-owned and -operated banks. Members include Black, Hispanic, Asian, Pacific Islander, Native American, and women-owned and -operated banks. MDIs are located across 32 states and the District of Columbia, Puerto Rico, and Guam. For more information, visit nationalbankers.org.